A qualitative assessment of the approaches adopted by Malta-based audit firms for the detection of money laundering : insights from semi-structured interviews

Abstract

Purpose: The purpose of this research is to comprehensively investigate the landscape of money laundering detection techniques within Maltese audit firms. It aims to identify the specific money laundering detection methods employed by these audit firms and understand how effectiveness is assessed. The study also delves into the adaptive strategies of Maltese audit firms in response to evolving threats and regulatory changes concerning money laundering detection. Additionally, it seeks to uncover the challenges and limitations encountered by Maltese audit firms in implementing or refining money laundering detection techniques. The research further focuses on the integration of AI-powered monitoring tools within audit practices, aiming to assess their impact on efficiency, effectiveness, and compliance compared to traditional methods. Finally, the study aims to identify perceived weaknesses in money laundering detection techniques and evaluate their implications for Maltese audit firms. Design: The objectives of the study were reached through semi-structured interviews with the Big Four audit firms. Findings: The study reveals a comprehensive approach, combining strong governance, regular training, and advanced detection techniques. Moreover, technology is essential for effectively combating money laundering and ensuring compliance in audit firms. Conclusions: Significant progress has been made in preventing, detecting, and responding to money laundering. However, additional efforts are needed, especially in enforcing regulations, as the incidence of illicit activities is increasing, and fraudsters continuously develop new methods to carry out their schemes. Value: This study emphasises how Maltese audit firms may reduce the risk of money laundering by using money laundering detection systems. The significance and advantages of corporate governance in Maltese audit firms were further highlighted by this study.